The question is way too broad, not least because it is not geographically-bounded, and there are as many ISP business plans as their are ISPs. However, you can look at the technology and business conditions of the day and get a feel for the various options.
My experience is mainly from the UK in the 1995-2001 era. The state-owned telco had been privatised a decade beforehand so there were relatively few restrictions, but it was still effectively a monopoly provider and priced appropriately. Other European countries had it much worse; some would have had it better. Given the vagueness, prices I give are zeroth-order approximations. There are still order-of-magnitude differences between countries today.
The minimum equipment required to set up a dialup ISP is some sort of Internet connection, some sort of PSTN connection and modems to answer calls, and a router to plumb the two together. Although not strictly required, users would expect the ISP to also provide a mail server, possibly Usenet access, and maybe even a bit of webspace for their home pages. (This would be the same now in 2020 with a for-fun setup lashed-together over VoIP or a softmodem running in Asterisk as it did in 1990 with real phone lines and real modems.)
A 64kb/s leased line would have been around £1-10k setup depending on location, and £1k/month with a 1-5 year minimum. Each POTS line was £100 setup plus £10/month with a 12 month minimum. A modem was around £100. A computer (to be a router and/or mail/Usenet/web server) was around £1k. An enthusiastic but naïve techie to make it work could be hired for £1k/month.
As the business expanded, that 64kb/s line would be added to or upgraded, the wall of POTS lines, modems and port concentrators would be replaced with more compact ISDN30 lines (in Europe; T1 in the US) and specialised ISDN30 digital modems (which as a useful side-effect also increased the maximum dialup speed from 33.6kb/s to 56kb/s) and so on, but that stuff was professional kit rather than a lash-up of consumer gear and so even more expensive.
So the ISP's costs are running into the thousands per month before they've even gotten their first customer.
However, although the opex and capex costs are outrageous, the setup cost of a new customer is virtually zero: an entry in the RADIUS database and perhaps a bit of phone support if they couldn't be bothered to read the instructions. The marginal costs were the POTS circuit dedicated to the user while they were connected, and whatever bandwidth they were using.
There is no need to bind them into anything but a month-by-month contract to cover the costs. The user would pay around £10/month, mostly because Demon Internet pioneered dialup Internet in the UK and ran with "tenner a month" in 1992 when they started and stuck with it until the bitter end. Although there was a cost to the ISP in tied up equipment whenever a user was connected, because local phone calls cost up to £2.40/hour, that tended to limit call time and ISPs could offer flat-rate access. In countries such as the USA with free local calls, they'd have to find some other way to discourage usage such as per-minute charges or an hours cap.
Although BT was a de facto monopoly for consumer connections, Mercury were offering business services in the 1980s and so there were legal structures in place setting out settlement rates for cross-telco calls to cover the various trunk and last-mile costs. Trunk costs cratered as technology improved into the 1990s — upgrade the fibre-optic equipment on the ends of an already paid-for line and it can carry many more calls — and so the last mile revenue became significant enough that by around 1997 large ISPs could demand a cut of that £2.40/minute by shopping around telcos, or even just becoming a telco. Initially it merely subsidised operations and helped avoid increases to the monthly fee, but eventually Freeserve came along and pretty much copied Demon but operated purely from call revenue, making the question of contract duration moot: if you stop calling, you're no longer paying for the service.
Eventually FRIACO came along which the consumer could opt to pay a bit extra per month for free calls to ISPs participating in the scheme, bringing the USA's problems to British ISPs, but this was at the same time as ADSL was kicking off so heavy users were abandoning dialup and the usage caps were set high enough that it was effectively unlimited for all but the small handful of abusive users treating it as a cheap leased line.
Sleazier ISPs would bind people into longer contracts and/or be difficult about cancellation, but there was no need to do so.
